The South African Revenue Service (Sars) has moved to seize PetroSA’s Mossel Bay refinery amid growing concern that the state-owned oil and gas company is unable to settle its R4.5 billion tax liability.
The development comes just three months after PetroSA abruptly terminated its controversial partnership talks with Russia’s Gazprombank, which was expected to help fund the restart of the Mossel Bay gas-to-liquids (GTL) refinery. The cancellation raised fresh doubts about the long-delayed plan to revive the plant, once a flagship asset in South Africa’s energy sector.
According to Business Day, PetroSA executives told Parliament’s portfolio committee on mineral and petroleum resources last week that the company cannot afford to pay the R4.5 billion debt. A senior PetroSA manager reportedly confirmed that a Sars official had recently visited the refinery to assess assets for possible attachment.
The refinery, mothballed since 2020 after offshore gas feedstock ran out, was once the world’s largest GTL facility. Reviving it has been central to the government’s strategy to boost domestic fuel production and reduce South Africa’s heavy reliance on imported refined products. However, the project has been plagued by governance failures, political disputes, and failed attempts to secure strategic partners.
Government of National Unity (GNU) partner the Democratic Alliance (DA) said the latest financial disclosures raise serious questions about whether PetroSA can realistically act as a viable partner in the project.
DA spokesperson James Lorimer said PetroSA’s only path to meaningful revenue is to restart the refinery — something it cannot do alone.
“To restart the gas-to-liquids plant at Mossel Bay, PetroSA would need a private-sector partner. One is unlikely to be found while PetroSA remains an unviable partner. It trades oil on an unsustainable basis, has a poor credit record and cannot compete efficiently with other traders.”
The DA has repeatedly criticised the government’s handling of PetroSA, pointing to years of losses, governance lapses, and failed investments. Last week’s SARS visit, the party said, underscores the depth of the company’s financial crisis.
Lorimer told Parliament the company disclosed liabilities of around R20 billion against assets of only R13 billion, adding that PetroSA “continues to get deeper into the red every year as it loses money”.
“If PetroSA were a private company, it would be considered to be trading recklessly, and its directors would be liable for prosecution. But as a subsidiary of the Central Energy Fund, and a favoured child of the ANC, it is allowed to continue racking up debts and impeding South Africa’s fuel supplies,” he said.
With PetroSA’s liquidity and credibility in question, uncertainty is mounting over the feasibility and timing of the Mossel Bay plant’s reopening, which was previously projected for April next year. Analysts warn that any delay could further strain South Africa’s already fragile fuel security, especially as the country relies increasingly on imported refined petroleum products.
